M&S ahead on IT overhaul

Supply chain savings to hit £300m

Marks & Spencer says it's on track to deliver £300m in savings through the upgrading of its IT and restructuring of it supply chain.

The company has just published its annual results, which saw an increase of underlying pre-tax profits being posted of £714 million - a 13 percent increase.

In November M&S increased the "benefits case" of the IT upgrade and supply chain restructure from £250m to £300m, without increasing the capital investment required.

The company also brought forward the completion of the plan to 2015/16. "We remain firmly on track to deliver against this target", said M&S chief executive Marc Bolland, in his results statement.

Bolland said the second phase of M&S' SAP roll-out - its new core business system - is "now complete". He said a final phase, which will include a new stock ledger, is due to commence this financial year.

With the new systems M&S is able to close warehouses – with 30 closed out of the 110 planned as of last November – and increasingly concentrate operations at a one million square-foot warehouse in Bradford, which opened last May.Construction has started on a second site in the East Midlands, which will be a combined National Distribution Centre and a dedicated e-commerce facility.

Bollan said, "Following successful trials, we started the roll-out of new forecasting and space planning and ranging systems in our Foods business, which will deliver improved availability and waste management." He said M&S had completed the implementation of a new stock management system, which is providing more accurate real-time stock level information.

Bolland added, "We are in the process of rolling out the new point of sale (POS) system, currently in 400 stores, and due be completed before Christmas."